BCMM INVESTMENT ROUNDTABLE 12 APRIL 2017
Presentation Outline ELIDZ Vision 2020 Sector Prioritisation ELIDZ Impact 2
ELIDZ VISION 2020
ELIDZ S DESIRED VALUE TO CUSTOMERS AND SHAREHOLDERS 4
ELIDZ Vision 2020 Secure 23 new investors contributing R2.3 billion worth of private sector investment into the zone in the automotive, renewable energy, aquaculture, ICT, agro progressing and advanced manufacturing between 2015 and 2020. Increasing levels of direct employment by zone enterprises to 5758 by the end of 2019/20. Construction of 10 new infrastructure/superstructure development projects. Export 37% of total zone enterprises production Qualify 13 industrial development and innovation opportunities for market exploitation in the period 2015/16 to 2019/20 5
Strategic Interventions to achieve Vision 2020 Development of the Berlin as an Agro and Renewable Energy Hub ELIDZ has kick-started process to apply for the designation part of Berlin as an extension of the ELIDZ footprint. Positioning Berlin as a hub for heavier industry, renewable energy generation (wind farm) and agro-industrial park. 1 st project is ELIDZ Windfarm. 2 key energy generation projects attracted for Berlin. Key success factors: Signing of Power Purchase Agreement Upgrade of Kemba Power Station Donation of Transformers Access to waste for waste to energy generators (ie Green Cape WISP project) 6
Strategic Interventions to achieve Vision 2020 Maximising the localization potential linked to W206 MBSA has identified extensive growth potential linked to W206 both in terms of localisation of new suppliers and growth of the current plant. ELIDZ has already undertaken a feasibility study to look at availability of land to accommodate both additional suppliers and MBSA growth. BCMM is key in unlocking the expansion as identified property is state-owned and would only be accessible through BCMM s intervention. ELIDZ currently working on the business case for the ASP expansion to ensure facilities are ready by end 2019/20. Key success factors: Unlocking land for MBSA expansion Funding for construction of facilities for new suppliers to ensure readiness for start of model. 7
Strategic Interventions to achieve Vision 2020 IMPROVING LOCATIONAL ADVANTAGES IN LIGHT OF GROWING SEZ COMPETITION Increased competition (new SEZs) and challenging economic climate. Need for improved locational competitiveness. Key success factors: Reduced cost of doing business Competitive Logistics Infrastructure Connectivity with other industrial hubs Skills availability Industry incubation and support (Renewable Energy, Aquaculture and ICT) 8
TARGETED SECTORS & INVESTOR PIPELINE
ELIDZ Targeted Sectors ELIDZ SECTOR SEZ ACT IPAP 2 PIDS PEDS Automotive X X X X Advanced Manufacturing X X X X Renewable Energy X X X X ICT X X X X Aquaculture DAFF National Aquaculture Strategy Framework 2013 & original IPAP X Agro-Processing X X X X 10
Sector Prioritisation Matrix Rating SECTOR SCORE RATING Automotive 80.00 1 ICT & BPO 73.33 2 General Manufacturing 70.00 3 Aquaculture 66.67 4 Agro-Processing 63.33 5 Renewable Energy 63.33 5 11
KEY DRIVERS FOR AUTO INVESTMENT Presence of automotive industry base Skilled and experienced workforce Market Presence Logistics Infrastructure Low input cost 12
PROPOSED STRATEGIC INTERVENTIONS Undertake a logistics connectivity needs study for the ELIDZ Undertake land availability and feasibility study for further localization of Automotive Suppliers Collaborate with Transnet and BCMM to develop and lobby for a business case for the upgrade of the EL GP rail link Lobby for funding for the construction of the Harbour Arterial Road. Develop and implement a stakeholder lobbying strategy to improve locational advantages based on ELIDZ Sector SWOT (Policy, MBLA) 13
KEY DRIVERS FOR GENERAL MANUFACTURING INVESTMENT Skilled and experienced workforce Market Presence Logistics Infrastructure Availability and cost of inputs (raw materials and electricity) Competitive Operating costs 14
KEY STRATEGIC INTERVENTIONS Undertake detailed sector analysis to establish potential investment projects for East London (IPAP/NHI, Op Phakisa)\ Develop a infrastructure plan to support the General Manufacturing Sector. 15
KEY DRIVERS FOR RENEWABLE ENERGY INVESTMENT Strong, predictable and GROWING MARKET DEMAND. INCENTIVES AND MARKET SUPPORT such as feed-in-tariffs Physical location and INFRASTRUCTURE Access to SKILLS AND R&D CAPABILITY Cluster access 16
KEY STRATEGIC INTERVENTIONS Increase support for the STP activities in the renewable sector and prioritize development of R&D into the renewable sector Develop a stakeholder lobbying strategy to improve locational advantages based on ELIDZ Sector SWOT (Energy Trader Partnership, SA LED Partnership) Develop and implement a sector advocacy campaign against imports (protection of local sector protection). Pursue the application for the designation of Berlin as an extension of the ELIDZ (SEZ) (windfarm project approval project as a trigger) Complete the development of a comprehensive, multi-sector infrastructure development plan for Berlin. 17
18 ELIDZ POSITIONING ICT SECTOR PROXIMITY TO THE OCEAN (landing international sea cables) EXISTING PRE-PACKAGED A CALL CENTRE PROJECT. Availability of EXISTING DATA CENTRE AND INFRASTRUCTURE PROXIMITY TO THE AIRPORT AND LINK TO CARGO FOR ICT/ELECTRONIC component manufacturers Ease of PUBLIC SECTOR TRANSACTING WITH ELIDZ SOC Access to SKILLS AND RESEARCH AND DEVELOPMENT (CORTEX HUB)
KEY DRIVERS FOR BPO INVESTMENT Favourable LABOUR MARKET REGULATIONS (cost of labour for BPO) Competitive Labour Costs Access to SKILLS AND R&D CAPABILITY Lowest COSTS FOR HOSTING ICT SERVICES RELIABILITY OF UTILITIES / resources such as electricity Excellent INFRASTRUCTURE AND CONNECTIVITY CAPABILITY. HIGH QUALITY LIVING ENVIRONMENT 19
KEY STRATEGIC INTERVENTIONS Lobby for funding of detailed feasibility study on opportunities in this sector and in supporting for other sectors (ICT Park Concept for internationally tradable services) Engage with BCMM on ICT infrastructure outlay to increase capacity and expand clientele. 20
KEY DRIVERS FOR AQUACULTURE INVESTMENT PRODUCT DEMAND AND ECONOMIES OF SCALE Competitive COST AND CONVENIENCE POLITICAL, ECONOMIC, ENVIRONMENTAL LAWS, Access to SKILLED LABOUR TECHNICAL BACKUP PROXIMITY TO MARKETS NATURAL FACTOR ENDOWMENTS (ie. Land, water, climate, topography etc) 21
Collaborate with relevant institutions for product development (food technology) to deepen processing opportunities. Develop an ICT incubator to develop SMMEs and improve sector competitiveness. 22
KEY DRIVERS FOR AGRO-PROCESSING INVESTMENT PRODUCT DEMAND, COMPETITIVE COST AND CONVENIENCE (Political, Economic, Environmental laws, labour, cultural mind set, REGULATIONS (land tenure patterns & policy, technical backup) DISTANCE TO MARKETS, Access to INPUTS (raw materials) NATURAL FACTOR ENDOWMENTS (ie. Land, water, climate, topography etc) to locate in the ELIDZ vs any given location. 23
Develop and implement a stakeholders lobbying strategy to improve the logistical connectivity of the AIP to primary production / feedstock suppliers (200km radius) Package, cost and lobby for funding of phase 1 of the Berlin Agro- Industrial Park. 24
Current Investor Pipeline Investment Stage Number of Investors Total Investment Amount in millions Total land uptake in square hectares Total employment Potential Early* 3 R 1,045 4.6418 155 Negotiation* 4 R 9,837 56 1,875 Advanced* 6 R 5,449 197.6052 1,273 Final* 12 R 1,551 38.1937 1,783 Total 25 R 17,882 296.44 5,086 25
Current Investor Pipeline(Cont.) 1 4% 1 4% 1 4% Sector & Number of Investors 5 20% 4 16% 0 0% 1 4% 4 16% 8 32% Agro processing Automotive Renewable Energy General Manufacturing ICT Pharmaceuticals Textiles Aquaculture Logistics 26
Pipeline Exposure to Port Reliant Investments Investor Investment Value (Rm) % of Pipeline Value* Number of Jobs* % of Pipeline Jobs* Multi-Model OEM 8 200 47.73% 1 400 37.03% FAW (Lost) 600 3.37% 1 200 24.09% BAIC (Lost) 11 000 39.03% 1 500 28.40% BarloWorld (Lost) 162 0.94% 400 10.58% TOTAL 19 962 4 500 27
Penalty of Settling at the ELIDZ Container Sizes Rail Road Rail FEEDER Vessel 20ft (ECL) R5 313 R4 942 R4 190 40ft (ECL) R 9 000 R 9 381 R 6 721 20ft (FCL) R 7 554 R 5 549 R5 194 40ft (FCL) R 10 354 R10 556 R8 390 28
ELIDZ IMPACT
2. ELIDZ IMPACT In 2016, Statistics South Africa (STATSSA) released a report on the Impact of the enterprises that are operational in the ELIDZ. The report illustrated notable growth by the surveyed zone community compared to the initial study done released by Statistics South Africa in 2013/14. Some highlights include:
2. ELIDZ IMPACT
2. ELIDZ IMPACT 32
2. ELIDZ IMPACT
2. ELIDZ IMPACT 2016/17 FY INCREASED INVESTOR INTEREST : 6 investors, valued at R2.4billion, with a job creation potential of 856 direct manufacturing jobs presented to board for approval during 2016/17. FIRM INVESTOR COMMITMENTS : 4 investors valued at R1.048bn with a job potential of 1400 signed agreements during 2016/17. INVESTORS BREAKING GROUND: 4 investors preparing to break ground and start construction in 2016/17 (Yekani, Nulatex, Clariter and Innovative Aquaculture). INFRASTRUCTURE UPGRADE AND INDUSTRY EXPANSION: 3 investments in advanced planning and early construction stages Wind Farm, Electrical Upgrade, YanFeng Extension
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